Morris Adler & Co. v. J.E. Jones & Co.

• Decision Date: 30 November 1922
• Docket Number: 6 Div. 671.
• Citation: 94 So. 816,208 Ala. 481
• Parties: MORRIS ADLER & CO. v. J. E. JONES & CO.
• Court: Alabama Supreme Court

94 So. 816

208 Ala. 481

MORRIS ADLER & CO. v. J. E. JONES & CO.

6 Div. 671.

Supreme Court of Alabama

November 30, 1922

Appeal from Circuit Court, Jefferson County; J. Q. Smith, Judge.

Action by Morris Adler & Co. against J. E. Jones & Co., for breach of a contract. From adverse rulings on pleading, plaintiff suffered nonsuit, and appeals. Reversed and remanded.

Percy Benners & Burr, of Birmingham, for appellant.

Black &amp Harris, of Birmingham, for appellee.

SAYRE J.

May 25 1920, plaintiff (appellant) entered into a contract with defendant whereby plaintiff undertook to sell, and defendant to buy, 500 bags of sugar to be shipped from Java in August or September following. The sugar arrived in America in December, 1920, and was tendered in performance of the contract; but defendant refused to accept or pay for the sugar, whereupon this action was brought to recover damages as for a breach of contract. Defendant filed special pleas 3 to 18. Pleas 11, 17, and 18 afterwards were withdrawn. Demurrer to plea 15 was sustained and overruled as to each of the other pleas. Plaintiff then suffered a nonsuit with a bill of exceptions reserving the ruling in favor of the several pleas for review in this court.

A majority of the special pleas proceeded upon the theory that the contract was void because made in violation of a rule of the United States Food Administration, made under authority of the act of Congress approved August 10, 1917 (40 Stat. 276; U.S. Comp. St. 1918, U.S. Comp. St. Ann. Supp. 1919, § 3115 1/8e et seq.), prohibiting the sale, among other commodities, of sugar for shipment or delivery more than 60 days after the making of such contract; but now it is conceded that this regulation had been repealed before the parties entered into the contract here at issue, and that the trial court erred in overruling plaintiff's demurrers to these pleas. This leaves for consideration the rulings on pleas 3, 4, 5, 6, and 16.

The gist of pleas 3, 4, and 5 is that the contract alleged in the complaint was void and of none effect because made in violation of section 5 of the Lever Act (40 Stat. 276, supra), reading as follows:

That, "from time to time, whenever the President shall find it essential to license the importation, manufacture, storage, mining, or distribution of any necessaries, in order to carry into effect any of the purposes of this act, and shall publicly so announce, no person shall, after a date fixed in the announcement, engage in or carry on any such business specified in the announcement of importation, manufacture, storage, mining, or distribution of any necessaries as set forth in such announcement, unless he shall secure and hold a license issued pursuant to this section. The President is authorized to issue such licenses and to prescribe regulations for the issuance of licenses and requirements for systems of accounts and auditing of accounts to be kept by licensees, submission of reports by them, with or without oath or affirmation, and the entry and inspection by the President's duly authorized agents of the places of business of licensees. Whenever the President shall find that any storage charge, commission, profit, or practice of any licensee is unjust, or unreasonable, or discriminatory and unfair, or wasteful, and shall order such licensee, within a reasonable time fixed in the order, to discontinue the same, unless such order, which shall recite the facts found, is revoked or suspended, such licensee shall, within the time prescribed in the order, discontinue such unjust, unreasonable, discriminatory and unfair storage charge, commission, profit, or practice. The President may, in lieu of any such unjust, unreasonable, discriminatory, and unfair storage charge, commission, profit, or practice, find what is a just, reasonable, nondiscriminatory and fair storage charge, commission, profit, or practice, and in any proceeding brought in any court such order of the President shall be prima facie evidence. Any person who, without a license issued pursuant to this section, or whose license shall have been revoked, knowingly engages in or carries on any business for which a license is required under this section, or willfully fails or refuses to discontinue any unjust, unreasonable, discriminatory and unfair storage charge, commission, profit, or practice, in accordance with the requirement of an order issued under this section, or any regulation prescribed under this section, shall, upon conviction thereof, be punished by a fine not exceeding $5,000, or by imprisonment for not more than two years, or both." U.S. Comp. St. 1918, U.S. Comp. St. 1919, § 3115 1/8g.

Section 24 of the Lever Act provided:

That "the provisions of this act shall cease to be in effect when the existing state of war between the United States and Germany shall have terminated, and the fact and date of such termination shall be ascertained and proclaimed by the President; but the termination of this act shall not affect any act done, or any right or obligation accruing or accrued, or any suit or proceeding had or commenced in any civil case before the said termination pursuant to this act; but all rights and liabilities under this act arising before its termination shall continue and may be enforced in the same manner as if the act had not terminated. Any offense committed and all penalties, forfeitures, or liabilities incurred prior to such termination may be prosecuted or punished in the same manner and with the same effect as if this act had not been terminated." U.S. Comp. St. 1918, U.S. Comp. St. Supp. 1919, § 3115 1/8pp.

But by the act "to provide for the national welfare by continuing the United States Sugar Equalization Board until December 31, 1920, and for other purposes" (41 Stat. 386) it was provided:

"That the President is authorized to continue during the year ending December 31, 1920, the United States Sugar Equalization Board (Incorporated), a corporation organized under the laws of the state of Delaware, and to vote or use the stock in such corporation held by him for the benefit of the United States, or otherwise exercise his control over the corporation and its directors, in such a manner as to authorize and require them to adopt and carry out until December 31, 1920, plans and methods of securing, if found necessary for the public good, an adequate supply and an equitable distribution of sugar at a fair and reasonable price to the people of the United States. Sections 5 and 10 of the act entitled 'An act to further provide for the national security and defense by encouraging the production, conserving the supply, and controlling the distribution of food products and fuel,' approved August 10, 1917, as far as the same relates to raw or refined sugar, syrups, or molasses, are hereby continued in full force and effect until December 31, 1920, notwithstanding the provisions of section 24 of said act."

It will be observed that the last-quoted act continued sections 5 and 10 of the Lever Act in full force and effect until December 31, 1920.

By presidential proclamation, October 8, 1917, all persons, firms, corporations, and associations engaged in the business of importing, manufacturing, or distributing sugar, among other commodities, were required to secure licenses.

The question then is whether section 5, supra, suffices to invalidate the contract alleged in this cause. The complaint shows that plaintiff engaged in the business of importing sugar-probably also the business of distributing within the meaning of the act. The pleas are that plaintiff had no license. Against this rather obvious combination of facts it is urged: (1) That plaintiff is not alleged to have committed a willful violation of the act (citing Kuenster v. Meredith [D. C.] 264 F. 243); (2) that the statute does not intend to work a forfeiture of contracts in the circumstances here shown; (3) that the requirement of a license had been abrogated prior to defendant's failure or refusal to execute the contract according to his undertaking.

1. The statute is obscure in places. It denounces any person who knowingly engages in or carries on any business for which a license is required. Kuenster v. Meredith presented a very different question. The real issue there was whether Kuenster, who had at one time violated a regulation of the Food Administration, should thereafter be...